All posts tagged Jobless Claims

Weekly jobless claims offer another relatively upbeat sign that the job market is gaining some momentum.

Initial claims fell by 6,000 to 361,000 in the week ended Aug. 4, according to the Labor Department, which was better than economists were expecting.

Perhaps more importantly, a Labor Department official said there were no unusual factors swaying this report. Claims were particularly choppy last month, largely due to seasonal factors in the auto industry.

“Volatile factors that affect jobless claims during the summer restrict the usefulness of any one report, but the downward trend in claims in recent weeks has been encouraging,” says Cooper Howes at Barclays.

Fewer summertime shutdowns than usual at auto plants prompted some economists to worry that a portion of last month’s improving numbers may not have been sustainable.

But for now, it appears that the figures are moving in the right direction.

“What will be more important than these short-term gyrations is where claims settle down now that the distortions are past,” says Joshua Shapiro, chief U.S. economist at MFR Inc. “We suspect that the data will point to a labor market that is soggy but not collapsing.”

Weekly claims fell by 26,000 to a seasonally adjusted 350,000 in the week ended July 7, the lowest level in more than four years. It was also the biggest weekly drop since March 2008.

But many market observers caution the drop is more due to seasonal factors rather than a substantial improvement in the labor market. Auto factories typically close down in early July, but this year there have been fewer shutdowns than usual.

“Each summer, auto shutdowns give the government trouble and the seasonals are very unreliable,” says Dan Greenhaus, chief global strategist at BTIG. “We absolutely do not believe this is a ‘real’ number.”

The Philly Fed’s June manufacturing index, which came in sharply below expectations, headlines the dour parade. Existing-home sales didn’t help matters, falling 1.5%. The lone outlier came from the Conference Board’s leading index, which unexpectedly rose.

Combine these reports with this morning’s jobless claims, and today’s data show the economic recovery is losing momentum, and a potentially long summer lies ahead.

“I read today’s data as broadly consistent with an economy that has lost quite a bit of steam, but is not collapsing,” says Stephen Stanley of Pierpont Securities.

Stocks are trading around morning lows. The Dow is down 76, led lower by Alcoa, Home Depot and H-P. The S&P 500 is off 12, and the Nasdaq Comp is down 30.

Don’t worry about the jobless claims numbers, because the Fed’s gonna rip with QE3 any day now.

Wait, can we still say that?

Jobless claims this morning “fell” by 2,000, to 387,000. That is, interestingly enough, a rise of 1,000 from last week’s initial estimate of 386,000 (hey, they call these “initial jobless claims” for a reason). So last week, claims really were 389,000, not 386,000.

“After a fairly substantial period of constantly lower jobless claims, a new, more unwelcome trend higher has taken hold,” BTIG Economics noted this morning. “This of course has ramifications for the broader monthly jobs report but clearly, given the current trend, a meaningful pickup in monthly job additions looks unlikely.”

This is just a casual observation, well, maybe a bit more than casual but not full-blown PhD level discourse, but it seems like an awful lot of assets are at critical stages. Gold, stocks, bonds, crude oil, the euro, everything seems to be at some sort of turning point.

You take them together like that, and you see capital markets that are acting like a mirror reflection of the the economy. Certainly here in the U.S., it remains mired somewhere between stall speed and escape velocity, and probably a bit closer to the former than the latter.

That came into sharper relief after this morning’s data dump. A couple of jobs reports, the GDP revision, and the Chicago PMI all painted a picture of a weak U.S. economy, one that may be growing technically but doesn’t appear to be growing in any real sense.

The S&P 500 today is flirting with the 1300 level, but the real mark to keep an eye on comes a bit lower: the 200-day moving average, which sits around 1284.

Kathleen Madigan came on the Markets Hub this morning to break down the data.

The U.S. economic data broke the string of bad data releases out this morning. Well, sort of.

To recap: PMIs, purchasing manager index reports, came out this morning for China, Germany, France, and the euro zone as a whole. They were uniformly bad. The recession in the euro zone is deepening (go figure!) and China’s economy is slowing down, sparking pledges from the Communists that they’ll do something to keep the fires stoked over there.

The reports, oddly enough, didn’t hurt European stocks, although the euro did fall as low as 1.2514. Asian shares were mixed, with China down but Japan up.

Initial jobless claims fell just 1,000, which was better than the expected increase of 5,000, and at least takes us one more week away from that spike toward the 400,000 level that had everybody freaked.

Initial jobless claims now sit at 367,000, (after the inevitable revision to last week’s data, this time an upward move of 3,000). The continuing claims fell by 5,250 to 379,000; that one’s still a bit too close to 400,000 for comfort.

For the record, the total number of all people claiming any level of benefits fell by 174,529, to 6.4 million. Some of those people likely found jobs, some likely fell off the radar. The breakdown of that split remains an open question.

BTIG strategist Dan Greenhaus wrote that it now appears the spike in the data was seasonal. “If the most recent week’s data is repeated throughout May, or dare we say improves a bit more, we can expect the pace of job creation to accelerate back to more ‘normal’ levels of between 150,000-200,000.”

We got two more pieces of the jobs picture this morning. Let’s look at them:

First, initial claims took a big dive last week, dropping 27,000 to 365,000. You can all breathe now. It’s not all sun and roses, of course. Last week’s initial claims were revised higher, as they are seemingly every week, to 392,000, a distressing number. The four-week average nudged up by 750 to 383,000, still too high.

Also, announced jobs cuts rose 7.1% in April, according to Challenger, Gray & Christmas, to 40,599 — and up 11.2% from last April — another bit of evidence that the jobs market isn’t doing well.

The research firm noted that a little less than 25% of the cuts came from the education sector, as the public sector deals with its own crippling debt load. Still, Challenger put a hedging spin on it.

“While job gains may indeed hit a lull in the coming months, we do not foresee a sudden upsurge in downsizing activity,” the firm wrote.

To help you sift through the morass, we’d like to create another in a string of anecdotal indicators that don’t really mean anything but are fun to play around with anyway, like the Super Bowl indicator, the hemline index, and the underwear index. We’ve come up this: the my-doctor-says-people-can’t-find-jobs index.

Our favorite economist/columnist, Dow Jones’ Kathleen Madigan, stopped by the Markets Hub this morning to break down the jobless claims and to talk about tomorrow’s GDP report.

The claims numbers are “a little concerning,” she said, and suggest that the April payrolls number, coming next week, “is not going to be a good one.” Not to overplay this, but she said there was a chance the number could even be negative, albeit just slightly so.

Either way, not good. What we’re finding out, she said, is that the economy wasn’t as good as it looked in the first few months of the year.

U.S. stock futures edge lower after a round of less-than-inspiring economic data.

Jobless claims came in at 388,000, relatively unchanged from a week ago and worse than economists’ expectations. While data over the last few weeks were skewed due to Good Friday and Easter holidays, the Labor Department says this week’s report is “clean” and not swayed by seasonal issues.

That is a worrisome sign for markets and the economy.

“It adds to concern about backsliding in job creation after faster employment gains earlier in the year,” says Jonathan Basile at Credit Suisse.

Jobless claims, despite being a historically noisy reading on the labor market, have been one of the data-point pillars of the recovery meme. But they’re reversing course, and creeping back to the 400,000 level that had us all so transfixed last year.

Stock futures turned negative in the immediate aftermath of the report. At last check, Dow futures were up 20 points.

(As a side note, we cannot remember the last time that the Labor Department didn’t revise the previous week’s numbers higher. It’s kind of a weird trend.)

These are not particularly good numbers. Keep in mind that this is not a measure of hiring, but of firing. Still, the more people being fired, or temporarily laid off, you can guess it means less people being hired.

“This number will stoke fears that the weakness in Friday’s NFP report is persisting,” wrote David Semmens, senior U.S. economist at Standard Chartered. “We are not worried about a collapse, but we do remain cautious.”

A less-than-stellar round of economic data this morning has prompted another downbeat tone in the market minutes after the opening bell.

The final reading of fourth-quarter GDP was unrevised at 3.0%. Economists had been expecting quarterly GDP would tick up to 3.2%. Overall 2011 GDP came in at 1.7%, well below the 3.0% rate of expansion in 2010.

While the economy ended the year on a relatively high note, it appears 2012 hasn’t kicked off at the same pace. Many economists expect first-quarter growth figures will come in around 2.0%.

Here’s a quick dispatch from Dow Jones reporter Javier David on what impact this data may have on future accommodative policies from the Fed:

Another healthy round of jobless claims give the bulls some ammo, but the overall picture this morning remains downbeat: safe-haven assets are back in vogue following some weaker-than-expected economic data out of Europe and China.

Jobless claims dropped by 5,000 last to 348,000, a fresh four-year low, and another indication that the labor market is continuing to improve. The four-week moving average, which aims to smooth out the week-to-week volatility, slipped to 355,000.

Tumbling jobless claims show fewer employers are laying off workers and many have actually picked up the pace of hiring. The economy has averaged 245,000 monthly job gains over the last three months.

U.S. stock futures trimmed some losses following the claims data. Dow futures were recently down 50 points after falling more than 90 points earlier this morning. S&P 500 futures recently shed 7 points.

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